South African Airways (SAA) has appointed yet another new acting CEO, the previous head of Human Resources, Ms Thuli Mpshe. The process through which the appointment has come about raises burning questions that must be answered in the interests of transparency and to avoid further instability.

The DA will call on the Minister of Finance, Nhlanhla Nene, to summon the entire SAA board to appear before a joint sitting of the Finance and Public Enterprises Portfolio Committees to answer the following questions:

• Were either Minister Nene or Minster Brown consulted regarding this appointment?
• Was the board of SAA consulted regarding this appointment?
• If the required consultation did not take place, how did the appointment happen and does this render the appointment null and void?
• How does this appointment affect the turnaround strategy?
• Who else was considered for the position?
• This is the sixth CEO in three years. Why was someone with actual aviation industry experience not appointed?
• Why was former acting CEO of SAA, Nico Bezuidenhout not appointed?
• What is the personal relationship between Ms Mpshe and board chair Ms Mnyeni?

In January, SAA received a R6.5 billion guarantee from the Treasury, bringing the total guarantees it has been given to R14.5 billion. It has no equity and relies on state guarantees to raise capital. Debt costs are expected to amount to R500m for the 2014-15 financial year from R250m in the previous period. SAA reported a R2.5 billion loss in the 2013-14 financial period, up from R1.7bn in the previous financial year. It is abundantly clear that the company is in crisis.

The money that has been poured into SAA could have been put to better use to create jobs through supporting small to medium sized enterprises and facilitating the economic growth that South Africa so desperately needs.

Given the billions of taxpayers’ money that has been handed to SAA and the continued instability at the state owned enterprise, it is crucial that the SAA board account to Parliament on the plethora of problems crippling it. This is in the interests of both SAA and the South African public.

 

Issued by DA